Grokster

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Grokster Ltd. was a privately owned software company based in Nevis, West Indies that created the Grokster peer-to-peer file-sharing client in 2001 that used the FastTrack protocol. Grokster Ltd. was rendered extinct in late 2005 by the United States Supreme Court's decision in MGM Studios, Inc. v. Grokster, Ltd. The court ruled against Grokster's peer-to-peer file sharing program for computers running the Microsoft Windows operating system, effectively forcing the company to cease operations.

Contents

The product was similar in look and feel to Kazaa, marketed by Sharman Networks, and Morpheus, which was distributed by StreamCast. Grokster, along with Morpheus and Kazaa, are considered second-generation peer-to-peer file sharing programs. Unlike their predecessor Napster, these file sharing programs allowed users to trade files directly between one another, without these transactions passing through a centralized server. Because Napster maintained this fraction of control over the transaction of files through its server, it was ruled illegal because it should have exercised its power over the server to stop the sharing of copyright infringing files. Grokster and this second generation of peer-to-peer file sharing programs sought to avoid this legal obstacle. [1]

A summary of the piracy argument

It has been estimated that 90% of files shared on Grokster were downloaded illegally. [2] Whether such downloads have substantially affected the retail sales of music, videos, and other works protected by copyright and the intellectual property laws is a matter of debate. [3] Grokster claimed they did not violate any copyright laws because no files passed through their computers. They assigned certain user computers as "root supernodes" that acted as music hubs for their company. Thus they were not responsible for controlling any specific file downloads. [4]

The key issue in the copyright infringement case was the so-called "Sony safe-harbor" principle that was set by the Supreme Court over 21 years previously in Sony v. Universal Studios 464 U.S. 417 (1984). The ruling stated that, "...the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial non-infringing uses" (Sony 464 U.S. at 442). This case challenged the legality of using VTRs to copy content using Betamax tapes. Grokster argued that proof of reasonable, actual or potential, non-infringing use, is sufficient to fulfill the "substantiality" requirement. The RIAA and MPAA argued that Sony safe-harbor requires proof that the non-infringing use is the primary one; an incidental non-infringing use is not enough.

Among the amicus curiae briefs:

The history of the case in the U.S. courts

In April 2003, Los Angeles federal judge Stephen Wilson ruled in favor of Grokster and Streamcast (providers of Morpheus P2P software) against the Recording Industry Association of America and the Motion Picture Association of America and held that their file sharing software was not illegal.

On 20 August 2003, the decision was appealed by the RIAA and the MPAA.

On 17 August 2004, the United States Court of Appeals for the Ninth Circuit issued a partial ruling supporting Grokster, holding

This appeal presents the question of whether distributors of peer-to-peer file-sharing networking software may be held contributorily or vicariously liable for copyright infringements by users. Under the circumstances presented by this case, we conclude that the defendants are not liable for contributory and vicarious copyright infringement and affirm the district court's partial grant of summary judgment.

In December 2004, the Supreme Court agreed to hear the case. On 25 March 2005, billionaire and former Broadcast.com owner Mark Cuban announced he would finance Grokster's fight in the Supreme Court. [5] Oral arguments were held for MGM v. Grokster on 29 March 2005, and in June 2005, the court unanimously held that Grokster could indeed be sued for infringement for their activities prior to the date of this judgment. But the future impact of the case may only be to require software companies to more carefully advertise their packages to discourage illegal downloading (see also inducement rule).

Grokster settled with plaintiffs shortly after the Supreme Court's decision. On 14 February 2006, the plaintiffs filed motions for summary judgment as to the liability of the remaining defendants, StreamCast and Sharman. Defendant Sharman Networks reached a tentative settlement agreement in August 2006.

On 27 September 2006, Judge Steven Wilson of the United States District Court for the Central District of California granted summary judgment to the plaintiffs as to StreamCast's liability. The court rejected StreamCast's argument that the plaintiff needs to show specific instances of infringement resulting from StreamCast's acts, holding that "Plaintiff need prove only that StreamCast distributed the product with the intent to encourage infringement." [6]

Supreme Court decision leads to shutdown

Screenshot of the Grokster website following its shutdown Grokster.com Screenshot.png
Screenshot of the Grokster website following its shutdown

Grokster closed its site on November 7, 2005. A note on its home page cited a United States Supreme Court ruling that copying copyrighted material using "unauthorized peer-to-peer services is illegal" and while legal download services exist, "this service is not one of them."

The website is now threatening visitors that their actions can get them caught, displaying the visitor's IP address.

The screen text reads as follows:

The United States Supreme Court unanimously confirmed that using this service to trade copyrighted material is illegal. Copying copyrighted motion picture and music files using unauthorized peer-to-peer services is illegal and is prosecuted by copyright owners.

There are legal services for downloading music and movies. This service is not one of them.

YOUR IP ADDRESS IS XXX.XXX.XXX.XXX AND HAS BEEN LOGGED. Don't think you can't get caught. You are not anonymous.

— Grokster site [7]

In the aftermath of the Grokster warning, many users became alarmed that their IP addresses were being stored. Prosecution of such individuals relies upon what has commonly been referred to as a process of doe subpoena in which prosecutors are required to gain a series of subpoenas in order to find out the identity of the user behind the IP address in question. Following the shutdown of Grokster, blogs became inundated with concerned users fearful of the warning; however, there have been no reports of the use of doe subpoenas in this case.

Research into the effects of warnings such as the one left on Grokster’s website has shown that while these warnings can result in a substantial reduction in online file sharing of individuals, the overall availability of downloadable content did not diminish. Furthermore, researchers cannot account for how much of this reduction in individual file sharing is simply shifted to other file sharing programs. In cases where the RIAA has issued threats, the users who conduct the most file sharing usually reduced their daily transactions to levels below the level of prosecution. In effect, these warnings have only caused only a brief reduction in overall online file sharing. [8]

See also

Related Research Articles

Kazaa Media Desktop. was a peer-to-peer file sharing application using the FastTrack protocol licensed by Joltid Ltd. and operated as Kazaa by Sharman Networks. Kazaa was subsequently under license as a legal music subscription service by Atrinsic, Inc., which lasted until August 2012.

<span class="mw-page-title-main">LimeWire</span> Peer-to-peer file sharing application

LimeWire was a free peer-to-peer file sharing client for Windows, macOS, Linux and Solaris. Created by Mark Gorton in 2000, it was most prominently a tool used for the download and distribution of pirated materials, particularly pirated music. In 2007, LimeWire was estimated to be installed on over one-third of all computers globally.

Morpheus was a file sharing and searching peer-to-peer client for Microsoft Windows, developed and distributed by the company StreamCast, that originally used the OpenNap protocol, but later supported many different peer-to-peer protocols. On April 22, 2008, distributor StreamCast Networks filed for Chapter 7 bankruptcy after a long legal battle with music companies; all of their employees were laid off and the official download at www.morpheus.com stopped being available, though for a small period the website remained online. As of October 29, 2008, the official Morpheus website is offline, including all other websites owned by StreamCast Networks, specifically MusicCity.com, Streamcastnetworks.com and NeoNetwork.com.

In computer networks, download means to receive data from a remote system, typically a server such as a web server, an FTP server, an email server, or other similar systems. This contrasts with uploading, where data is sent to a remote server.

MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), is a United States Supreme Court decision in which the Court ruled unanimously that the defendants, peer-to-peer file sharing companies Grokster and Streamcast, could be held liable for inducing copyright infringement by users of their file sharing software. The plaintiffs were a consortium of 28 entertainment companies, led by Metro-Goldwyn-Mayer studios.

<i>A&M Records, Inc. v. Napster, Inc.</i> US legal case

A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 was a landmark intellectual property case in which the United States Court of Appeals for the Ninth Circuit affirmed a district court ruling that the defendant, peer-to-peer file sharing service Napster, could be held liable for contributory infringement and vicarious infringement of copyright. This was the first major case to address the application of copyright laws to peer-to-peer file sharing.

<i>In re Aimster Copyright Litigation</i>

In re Aimster Copyright Litigation, 334 F.3d 643, was a case in which the United States Court of Appeals for the Seventh Circuit addressed copyright infringement claims brought against Aimster, concluding that a preliminary injunction against the file-sharing service was appropriate because the copyright owners were likely to prevail on their claims of contributory infringement, and that the services could have non-infringing users was insufficient reason to reverse the district court's decision. The appellate court also noted that the defendant could have limited the quantity of the infringements if it had eliminated an encryption system feature, and if it had monitored the use of its systems. This made it so that the defense did not fall within the safe harbor of 17 U.S.C. § 512(i). and could not be used as an excuse to not know about the infringement. In addition, the court decided that the harm done to the plaintiff was irreparable and outweighed any harm to the defendant created by the injunction.

This is a timeline of events in the history of networked file sharing.

StreamCast Networks, Inc., was an American corporation, specializing in peer-to-peer software. Formerly named MusicCity, it created Morpheus, which was one of the first major peer-to-peer Internet applications.

The inducement rule is a test a United States court can use to determine whether liability for copyright infringement committed by third parties could be assigned to the distributor of the device used to commit infringement.

<i>BMG Music v. Gonzalez</i> U.S. court case

BMG Music v. Gonzalez, 430 F.3d 888, was a court decision in which the United States Court of Appeals for the Seventh Circuit ruled that a record company could sue a person who engaged in online sharing of music files for copyright infringement. The decision is noteworthy for rejecting the defendant's fair use defense, which had rested upon her contention that she was merely "sampling" songs with the intention of possibly purchasing the downloaded songs in the future, a practice known informally as "try before you buy".

Arts and media industry trade groups, such as the International Federation of the Phonographic Industry (IFPI) and Motion Picture Association of America (MPAA), strongly oppose and attempt to prevent copyright infringement through file sharing. The organizations particularly target the distribution of files via the Internet using peer-to-peer software. Efforts by trade groups to curb such infringement have been unsuccessful with chronic, widespread and rampant infringement continuing largely unabated.

File sharing is the practice of distributing or providing access to digital media, such as computer programs, multimedia, program files, documents or electronic books/magazines. It involves various legal aspects as it is often used to exchange data that is copyrighted or licensed.

Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), also known as the "Betamax case", is a decision by the Supreme Court of the United States which ruled that the making of individual copies of complete television shows for purposes of time shifting does not constitute copyright infringement, but can instead be defended as fair use. The court also ruled that the manufacturers of home video recording devices, such as Betamax or other VCRs, cannot be liable for contributory infringement. The case was a boon to the home video market, as it created a legal safe harbor for the technology.

<span class="mw-page-title-main">Copyright infringement</span> Illegal usage of copyrighted works

Copyright infringement is the use of works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, such as the right to reproduce, distribute, display or perform the protected work, or to make derivative works. The copyright holder is typically the work's creator, or a publisher or other business to whom copyright has been assigned. Copyright holders routinely invoke legal and technological measures to prevent and penalize copyright infringement.

File sharing is the practice of distributing or providing access to digital media, such as computer programs, multimedia, documents or electronic books. Common methods of storage, transmission and dispersion include removable media, centralized servers on computer networks, Internet-based hyperlinked documents, and the use of distributed peer-to-peer networking.

<i>Arista Records LLC v. Lime Group LLC</i> 2010 United States district court case

Arista Records LLC v. Lime Group LLC, 715 F. Supp. 2d 481, is a United States district court case in which the Southern District of New York held that Lime Group LLC, the defendant, induced copyright infringement with its peer-to-peer file sharing software, LimeWire. The court issued a permanent injunction to shut it down. The lawsuit is a part of a larger campaign against piracy by the Recording Industry Association of America (RIAA).

Winny copyright infringement criminal case in Japan was a Japanese criminal case in which Isamu Kaneko, the developer of P2P file-sharing program Winny, was indicted for aiding in copyright infringement. This was the first case in which a computer program developer faced a criminal charge for assisting in the copyright infringement of the program's users. In 2006, the Kyoto District Court found Kaneko guilty and fined him ¥1.5 million. On appeal, the Osaka High Court in 2009 overturned the lower court's decision, acquitting Kaneko. Finally, in 2011, the Supreme Court of Japan upheld the acquittal, holding that Kaneko did not intentionally induce infringement and was therefore not responsible for the users' unlawful actions.

<i>Columbia Pictures Industries, Inc. v. Fung</i>

Columbia Pictures Industries, Inc. v. Fung 710 F.3d 1020 No. 10-55946, was a United States Court of Appeals for the Ninth Circuit case in which seven film studios including Columbia Pictures Industries, Inc., Disney and Twentieth Century Fox sued Gary Fung, the owner of isoHunt Web Technologies, Inc., for contributory infringement of their copyrighted works. The panel affirmed in part and vacated in part the decision of United States District Court for the Central District of California that the services and websites offered by isoHunt Web Technologies allowed third parties to download infringing copies of Columbia's works. Ultimately, Fung had "red flag knowledge" of the infringing activity on his systems, and therefore IsoHunt was held ineligible for the Digital Millennium Copyright Act § 512(c) safe harbor.

Contributory copyright infringement is a way of imposing secondary liability for infringement of a copyright. It is a means by which a person may be held liable for copyright infringement even though he or she did not directly engage in the infringing activity. In the United States, the Copyright Act does not itself impose liability for contributory infringement expressly. It is one of the two forms of secondary liability apart from vicarious liability. Contributory infringement is understood to be a form of infringement in which a person is not directly violating a copyright but induces or authorises another person to directly infringe the copyright.

References

  1. ↑ "TechNews.com's Grokster Case At a Glance". The Washington Post . 2005-03-28. Retrieved 2012-04-17.
  2. ↑ Totenberg, Nina (29 March 2005). "Supreme Court Hears Copyright, File-Sharing Case". NPR .
  3. ↑ Oberholzer-Gee, Felix; Strumpf, Koleman (December 2004). "The Effect of File Sharing on Record Sales: An Empirical Analysis" (PDF). Archived from the original (PDF) on 26 February 2006.
  4. ↑ McGuire, David (28 March 2005). "At a Glance: MGM v. Grokster". The Washington Post .
  5. ↑ Newton, Jon (28 March 2005). "Mark Cuban Finances P2P Services in Supreme Court". MP3 Newswire .
  6. ↑ 2006 U.S. Dist. LEXIS 73714 at *58
  7. ↑ "Grokster" . Retrieved 18 June 2010.
  8. ↑ Bhattacharjee, Sudip; Gopal, Ram; Lertwachara, Kaveepan; Marsden, James (2006-04-01). "Sharing Activity: An Analysis of Music Industry Legal Reactions". Journal of Law and Economics. The University of Chicago Press. 49 (1): 91–114. doi:10.1086/501085. JSTOR   10.1086/501085. S2CID   14550974.
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